Six Continents £1bn handout?

SIX Continents, owner of the InterContinental and Holiday Inn hotel brands, has held out the prospect of a £1bn-plus return of cash to shareholders by the end of December if it fails to find a big acquisition.

The group, which reported a 41% half-year slump in profits at its core hotels division, has been under pressure from shareholders to do something with its £1.5bn-plus cash pile. Some investors think chief executive Tim Clarke has missed the boat for bargains in the face of the rapid rebound in hotel valuations since the beginning of the year.

But Clarke said he believed the 11 September impact on asset prices meant there would still be value deals to be done until December. If not, a share buyback programme would be launched before the New Year.

Pre-tax profits at the company formerly known as Bass slumped to £242m in the six months to 13 April from £303m last time on turnover of £1.82bn against £2.09bn before, smashed by the drop in business travellers within the US and in major European cities.

Its pubs fared better with an 8% profits improvement to £145m. Talks to merge them with Scottish & Newcastle's managed pubs failed recently.